TURKEY’S apparent demand for PE may have fallen by 8% in 2018 to around 2m tonnes from 2.2m tonnes of demand in 2017, I estimate.

PP doesn’t look to have been as badly affected, as I think apparent demand will be approximately 2.2m tonnes in 2018, some 40,000 tonnes less than in 2017, representing a decline of 2%.

Apparent demand is net imports plus local production. I used actual net imports from last year, an assessment of net imports for the full-year 2018 and the ICIS Supply & Demand predictions for local production in 2017-2018 to compile these estimates. These production estimates include virgin polymer and a small amount of recycled material.

These are only preliminary demand numbers and the final numbers for 2018 may not be as bad as this.

After a long period of solid growth, Turkey’s economy contracted 1.1% in the third quarter, and many economists expect it will enter into recession this year.

AFP adds that the lira was down by 28% against the US dollar last year, with financial markets unconvinced that the Turkish government has the right policies in place to tackle the country’s problems.

The ICIS team talks to many, many people on the ground in chemicals markets. This is demonstrated by my ICIS pricing colleague Ben Lake, when he writes in this article:

Turkey’s PE and PP players are bracing for a difficult year ahead after the market shrank in size in 2018, with most converters having reduced their outputs by 50-60%.

Climbing interest rates and the collapse in the lira’s exchange rate against other major currencies also meant that some of those who relied on bank credit found themselves bankrupt, having to shut their companies.

He adds that there are no obvious signs of a sudden economic recovery. Market players are instead expecting a gradual turnaround on a slowly rising value of the lira.